MIRA
INFORM REPORT
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Report Date : |
18.06.2008 |
IDENTIFICATION
DETAILS
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Name : |
KEMROCK
INDUSTRIES AND EXPORTS LIMITED |
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Registered
Office : |
296/A, GIDC, Industrial
Estate, Makarpura, Vadodara – 390 010, Gujarat |
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Country : |
India |
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Financials (as
on) : |
31.03.2007 |
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Date of
Incorporation : |
18.11.1991 |
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Com. Reg. No.: |
04-16625 |
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CIN No.: [Company Identification
No.] |
L36999GJ1991PLC016625 |
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TAN No.: [Tax Deduction & Collection Account No.] |
BRDK00913D |
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PAN No.: [Permanent Account No.] |
AAACK8810B |
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Legal Form : |
Public Limited Liability
Company. Company’s shares are listed on Stock Exchange. |
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Line of
Business : |
Manufacturing,
Importing and Exporting of FRP Products. |
RATING &
COMMENTS
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MIRA’s Rating
: |
Ba |
RATING |
STATUS |
PROPOSED
CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit
Limit : |
USD 2950000 |
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Status : |
Good |
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Payment
Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well
established company having satisfactory track. Trade relations are fair. Payments
are reported as usually correct and as per commitments. The company is doing
steady business. The company can
be considered normal for business dealings at usual trade terms and
conditions. |
LOCATIONS
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Registered/Head
Office : |
At
& Post : Asoj, Taluka : Vadodara-Halol Express Way, Waghodia, District Vadodara - 391 510, Gujarat |
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Tel. No.: |
91-2668-281059/281074/281088/281158/281157 |
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Fax No.: |
91-2668-281111/281159 |
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E-Mail : |
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Website : |
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Regional
Office/Factory : |
296/A,
G.I.D.C., Makarpura Industrial Estate,
Varodara - 390010, Gujarat |
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Tel. No.: |
91-265-2646010/2642449 |
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Fax No.: |
91-265-2638261 |
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E-Mail : |
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Marketing
office: |
303,
Commerce Centre, B-27, Veera Industrial Estate, off. New
Link Road,Opp. Same Adlabs, Andheri
(West), Mumbai – 400 053, Maharashtra |
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Tel. No.: |
91-022-26736294/26736295 |
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Fax No.: |
91-22-26736289 |
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E-Mail : |
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Factory 1 : |
296/A,
GIDC, Industrial Estate, Makarpura, Vadodara – 390 010, Gujarat |
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Factory 2 : |
Village
Asoj, Taluka Waghodia, District Vadodara – 391 510, Gujarat |
DIRECTORS
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Name : |
Mr. Kalpesh Patel |
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Designation : |
Managing Director |
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Date of
Birth/Age : |
47 Years |
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Qualification
: |
D.M.E. D.E.E. & D.P.T. |
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Experience : |
27 Years |
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Date of
Appointment : |
18.11.19991 |
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Name : |
Mr. Jayesh Patel |
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Designation : |
Executive Director |
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Date of
Birth/Age : |
44 Years |
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Qualification
: |
D.P.T. M.Sc. |
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Experience : |
22 Years |
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Date of
Appointment : |
18.11.1991 |
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Name : |
Mr. Jatin Patel |
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Designation : |
Whole Time Director (Upto 05.06.2003) |
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Name : |
Mr. Kaushik Bhatt |
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Designation : |
Director |
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Name : |
Mr. Arvind M. Shah |
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Designation : |
Director |
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Name : |
Mr. Manoj M. Shah |
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Designation : |
Director |
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Name : |
Mr. S. D. Lahiri |
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Designation : |
Director (Nominee GSFC) |
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Name : |
Mr. P. N. Muralidharan |
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Designation : |
Director (Upto 31.08.2004) |
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Name : |
Mr. Rohit Kothari |
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Designation : |
Director |
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Name : |
Mr. Mukund Bakshi |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. Dinesh Patel |
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Designation : |
Company Secretary |
BUSINESS DETAILS
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Line of
Business : |
Manufacturing,
Importing and Exporting of FRP Products. |
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Products : |
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PRODUCTION STATUS
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Class of Goods |
Unit |
Installed
Capacity |
Actual
Production |
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FRP Products |
Nos. |
-- |
267242 |
GENERAL
INFORMATION
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No. of
Employees : |
150 |
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Bankers : |
v Punjab National Bank, Vadodara, Gujarat v Canara Bank, Mumbai, Maharashtra v
State Bank of India, Vadodara v Indian Bank,
Vadodara v Allahabad Bank |
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Facilities : |
- all current assets of the company
namely stocks of raw materials, semi-finished goods, finished goods,
stores and spares and book debts and - an office premises situated at
Vadodara |
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Banking Relations : |
Satisfactory |
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Auditors : |
H. K. Shah &
Company Chartered
Accountants |
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Associates/Subsidiaries
: |
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Joint Venture
Company: |
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CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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25000000 |
Equity Shares |
Rs. 10/- each |
Rs. 250.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
7550000 |
Equity Shares |
Rs. 10/- each |
Rs. 75.500
Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS
FUNDS |
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1] Share Capital |
75.500 |
63.825 |
61.795 |
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2] Deposit
against Convertible Warrants |
8.185 |
0.000 |
0.000 |
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3] Reserves &
Surplus |
506.725 |
110.712 |
65.407 |
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4] (Accumulated
Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH
|
590.410 |
174.537 |
127.202 |
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LOAN FUNDS |
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1] Secured Loans |
1978.920 |
891.887 |
455.250 |
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2] Unsecured
Loans |
10.177 |
12.816 |
63.987 |
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TOTAL BORROWING
|
1989.097 |
904.703 |
519.237 |
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DEFERRED TAX
LIABILITIES |
17.330 |
19.796 |
17.553 |
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TOTAL
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2596.837 |
1099.036 |
663.992 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
1458.248 |
649.117 |
326.326 |
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Capital work-in-progress
|
1.660 |
21.094 |
35.039 |
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INVESTMENT
|
16.396 |
0.221 |
0.221 |
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DEFERREX TAX ASSETS
|
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES
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Inventories
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630.774
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268.562
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179.915
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Sundry Debtors
|
731.903
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245.758
|
162.265
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Cash & Bank Balances
|
75.293
|
6.330
|
36.207
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Other Current Assets
|
0.000
|
0.000
|
0.000
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Loans & Advances
|
219.406
|
32.706
|
32.456
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Total Current Assets
|
1657.376
|
553.356
|
410.843 |
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Less : CURRENT LIABILITIES & PROVISIONS
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Current Liabilities & Provisions
|
540.221
|
125.350
|
113.761
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Provisions
|
0.000
|
3.965
|
0.846
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Total Current Liabilities
|
540.221
|
129.315
|
114.607
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Net
Current Assets
|
1117.155
|
424.041
|
296.236
|
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MISCELLANEOUS EXPENSES
|
3.378 |
4.563 |
6.170 |
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TOTAL
|
2596.837 |
1099.036 |
663.992 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
1393.207 |
578.591 |
438.548 |
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Other Income |
6.604 |
0.437 |
0.000 |
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Total Income |
1399.811 |
579.028 |
438.548 |
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Profit/(Loss) Before Tax |
202.117 |
52.629 |
14.738 |
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Provision for Taxation |
12.828 |
4.744 |
0.487 |
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Profit/(Loss) After Tax |
189.289 |
47.885 |
14.251 |
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Earnings in Foreign Currency : |
818.886 |
337.162 |
208.190 |
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Total Imports |
720.172 |
189.642 |
80.186 |
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Expenditures : |
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Manufacturing Expenses |
115.043 |
47.808 |
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Administrative Expenses |
54.373 |
32.654 |
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Raw Material Consumed |
740.953 |
322.891 |
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Selling and Distribution Expenses |
120.786 |
62.940 |
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Financial Expenses |
140.818 |
66.417 |
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Increase/(Decrease) in Finished Goods |
[118.098] |
[81.218] |
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Payment to Auditors |
75.185 |
42.803 |
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Depreciation & Amortization |
68.634 |
32.104 |
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Total Expenditure |
1197.694 |
526.399 |
423.810 |
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QUARTERLY RESULTS
|
Particulars |
30.06.2007
(1st Quarter) |
30.09.2007
(2nd Quarter) |
30.12.2007 (3rd
Quarter) |
|
Sales Turnover |
325.800
|
563.300
|
523.000
|
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Other Income |
10.700
|
8.700
|
11.600
|
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Total Income |
336.500
|
572.000
|
534.600
|
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Total Expenditure |
190.500
|
402.900
|
341.900
|
|
Operating Profit |
146.000
|
169.100
|
192.700
|
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Interest |
70.500
|
74.900
|
75.500
|
|
Gross Profit |
75.500
|
94.200
|
117.200
|
|
Depreciation |
26.400
|
28.700
|
35.200
|
|
Tax |
-00.700
|
0.700
|
24.000
|
|
Reported PAT |
49.800
|
64.800
|
58.000
|
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
3.82 |
4.72 |
3.13 |
|
Long Term Debt-Equity Ratio |
2.22 |
2.51 |
1.60 |
|
Current Ratio |
1.14 |
1.02 |
1.09 |
|
Fixed Assets |
1.25 |
1.07 |
1.28 |
|
Inventory |
3.28 |
2.67 |
2.47 |
|
Debtors |
3.02 |
2.93 |
3.62 |
|
Interest Cover Ratio |
2.41 |
1.75 |
1.54 |
|
Operating Profit Margin(%) |
27.68 |
24.84 |
16.32 |
|
Profit Before Interest And Tax Margin(%) |
23.03 |
19.47 |
11.64 |
|
Cash Profit Margin(%) |
17.27 |
12.95 |
8.65 |
|
Adjusted Net Profit Margin(%) |
12.63 |
7.58 |
3.98 |
|
Return On Capital Employed(%) |
18.67 |
13.57 |
9.18 |
|
Return On Net Worth(%) |
49.27 |
30.03 |
12.82 |
LOCAL AGENCY
FURTHER INFORMATION
History:
Entrepreneurship and
Strategic Alliances have been the hallmark of company’s progress.
1995: The company entered into
license agreement with Creative
Pultrusions, Inc., USA for acquiring state-of-the-art pultrusion
technology. Today, with over 7 pultrusion lines of different capacities, the
company is the largest pultruder in the region.
2003: Fibergrate Composite Structures, Inc., USA identified the company as their
manufacturing partners, to manufacture and offer world class pultruded and
molded grating products. Fibergrate is a part of StonCor Group, Inc., USA which
functions under the umbrella of the huge multi-billion dollar, multi-locational
RPM Group, USA.
2004: Looking at the
present and future requirements, the company has gone for backward integration
with a specialized division to manufacture hi-tech phenolic resins for the
composites industry. Proven world class technology has been acquired from Georgia Pacific Resins, Inc., USA to
manufacture this polymer. Georgia Pacific Resins, Inc. is a global leader in a variety
of building products, paper products, industrial and specialty chemicals.
Performance
The Company's
performance during the year under report has been impressive with total income
registering a quantum leap of 142% from Rs. 57902.800 Millions to Rs. 1399.811
Millions. The profit before tax was Rs. 202.118 Millions as compared to Rs.
52.629 Millions in previous year; and the net profit increased from Rs. 45.304
Millions to Rs. 186.439 Millions.
The Management
Discussion and Analysis section of this report throws more light on various
operational and business aspects of the Company for the year ended 31st March
2007.
Management Discussion and Analysis:
Overview:
The Country's overall growth of GDP during 2006-2007 has been pegged at 9%
plus, whereas overall industrial growth has been 11.5% during 2006-2007 as
compared to 8.2% in previous year. The percentage share of Manufacturing
Industry in the GDP growth remained at about 15.5%. Strong consumption growth
coupled with spurt in exports and investments activities has helped India to
register double-digit industrial growth in financial year 2006-2007. Riding on
this momentum of growth, the Company has achieved excellent performance with
income and profits touching new heights.
Industry Structure and Developments:
The company is
operating in the business of manufacture and export of Fiberglass Reinforced
Polymer Composites (FRP) and Speciality Resins. The Company caters to the needs
of diverse industries like wind energy, oil and gas, chemical, petrochemical,
pharmaceutical, transport, power generation, building & construction
etc.
The Composite
growth in last three years has been exponential in India. The main attribute
for this growth is the fact that India is fast emerging as the engineering and technology
hub for outsourcing. Coupled with this, the demand for new generation materials
like FRP Composites is gaining wider acceptance from end user industries. The
major markets for the continued growth of Composites will be Infrastructure,
Mass Transport, Automotive, Wind energy and Corrosion Industries.
Carbon Fibre:
The major markets for Carbon Fibre is in the advanced Composite applications
like Hydrocarbon, Transport and Aerospace industry The demand for Carbon Fibre
is increasing and currently is in short supply. The Company has taken a step
forward in becoming self sufficient to meet the future demand for high end
Composites with plans to set up manufacturing facility for Carbon Fibres.
Joint Venture:
During the
year, the Company formed a joint venture entity (viz., Georgia Pacific Kemrock
International Private Limited) with Georgia Pacific Resins Inc., of USA (now
known as 'GP Chemicals Equity LLC') for the marketing of speciality resins in
India and abroad. The Directors look forward to better business generation and
sustained growth form the new joint venture.
Technology Tie-up:
In April, 2007,
the Company reached a technical knowhow agreement with the National Aerospace
Laboratories (NAL), a constituent of Council of Scientific and Industrial
Research (CSIR), Bangalore. Under the agreement, the Company will produce and
commercialize Carbon Fibre with the know-how developed by NAL. Carbon Fibre
Technology is a high end technology enabling manufacture of strategic Composite
materials with wide ranging applications. With this development, the Company's
present range of Reinforced Polymer Composites will be further extended with
these high end product applications finding place in many end use industries.
This would have a positive impact on the growth and business of the
Company.
Expansion of Epoxy Resins Plant:
The first phase
of expansion of Epoxy Resins Plant at the site was successfully accomplished
during the year and plant was commissioned and made operational thereby adding new
product to the existing range of products.
Financial Performance with respect to
Operational Performance:
The Company has
experienced strong growth in revenues and profits in the year.
Despite
operating in a challenging environment, the Company achieved its highest ever
sales and profitability during the year under report. The Net Sales increased
by 140.79% from Rs.578.591 Millions in 2005-2006 to Rs.1393.207 Millions in
2006-2007. The profit after tax improved to Rs.189.289 Millions as against Rs.
47.885 Millions in the immediately preceding year showing an increase of
295.30%.
During the
year, the Company made capital expenditure of about Rs. 877.764 Millions, which
was funded partly form increased long-term borrowing and balance from internal
generations. The operating profit (PBIDT) increased from Rs. 151.151 Millions
to Rs. 411.5.690 Millions showing an increase of 172.29%.
Earning per
share for the year was Rs. 26.65 per share versus Rs. 7.10 per share in
previous year.
Opportunities and Business
Outlook:
India is
becoming a base for export of composites with an estimated growth rate of about
25% through 2010 on account of low labour cost and good Engineering and Design
Skills available locally.
The Company
always endeavours to provide customers total Composite solutions in order to
create value addition as well as continue to explore new products and processes
that will provide products of international standards.
A major
challenge in the future for the Company is to increase awareness among
designers, industrial professionals and the users about the advantages and
usage of composite materials and new application areas. On this path, the
Company is actively exploring various options of developing high end speciality
products with new applications.
The long-term
outlook for the Reinforced Polymer Composites business remains robust. On the
demand front, the global Reinforced Polymer Composites consumption has been
growing over the past few years fuelled by an increasing preference for advanced
composite materials. India is among the emerging markets for the outstanding
growth potential in coming years in areas like Infrastructure, Wind energy,
Mass Transport, Petrochemicals and Building Products. Based on the current
trends, the FRP Industry is estimated to grow at 25% annually in the coming
years.
Segment-wise and Product-wise Performance:
As the Company
is primarily engaged in the manufacture of Fiberglass Reinforced Polymer
Composites (FRP) and Resins products and as these products find markets
domestically and internationally, the Company is considered to be operating in
two different product segments as well as geographical market segments i.e.,
domestic and export.
On the export
front, the Company's FRP products find major markets in U.S.A. and Europe,
while the exports for Resins, compared to previous year, have found increasing
markets in USA in addition to the existing markets in SAARC countries and the
Middle East countries.
Threat and Risk Concerns:
The Industry is
facing following major threats and challenges:
i. The recent
strengthening of the Indian Rupee against US Dollar poses a continuing risk of
appreciation in the value of Indian Rupee against US Dollar. This can adversely
impact the export realization thereby affecting profitability of the
Company.
ii. Continuing
volatility in raw material prices due to spike in international crude oil
prices.
iii. Rising
interest rates.
iv. Changes in
the Government policies of foreign countries like China, Korea, Taiwan etc.,
may affect the supply and prices of key raw materials.
The company’s fixed
assets of important value includes Vehicles, land & building, machinery and
office equipments.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs. 42.92 |
|
UK Pound |
1 |
Rs. 84.48 |
|
Euro |
1 |
Rs. 66.66 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|